NOTICE
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DA 95-941
April 25, 1995
Mr. Peter Feinberg
Dow, Lohnes & Albertson
1255 Twenty-Third Street
Washington, D.C. 20037-1194
Dear Mr. Feinberg:
This letter is in response to your request for a waiver of Section 76.922(d)(2) of the
Commission's rules which you filed with the Commission on behalf of Cox Communications,
Inc. ("Cox") on March 31, 1995. You specifically request that the Commission extend the
deadline for implementing transition relief system inflationary adjustment to March 30, 1996
for the September 30, 1992 through June 30, 1994 inflation period.
In the Second Order on Reconsideration, Fourth Report and Order, and Fifth Notice
of Purposed Rulemaking, we granted two classes of operators transition relief by not
requiring them to implement the full 17% reduction rate, pending a review of such operator's
prices and costs. We decided not to allow transition relief systems to increase their
transition rates to reflect inflation pending the review of such operator's prices and costs.
As you indicate, in the Ninth Order on Reconsideration we permit transition relief systems to
adjust regulated rates between April 1, 1995 and August 31, 1995 for inflation from
September 30, 1992 through June 30, 1994. We decided to allow transition relief systems
to adjust for inflation because we have not yet completed our collection of price and cost data
and we felt that it would be unfair to delay any further implementation of inflation
adjustments for transition relief systems.
As you note, the current Commission rules permit operators to adjust their rates
quarterly for external costs and annually for inflation. You indicate that because of
regulatory lag inherent in filing and implementing rate adjustments for regulated service at
the local level where franchising authorities certified to regulate rates must approve
inflationary adjustment, submitting multiple filings during the year makes the implementation
date for rate adjustment highly unpredictable. You also indicate that while Cox may adjust
for cable programming service rates for inflation in systems without prior approval where no
refund has been ordered, it is often impractical to adjust rates for inflation on different
regulated tiers at different times. You argue that by granting this extension request,
individual Cox systems will be able to use their discretion to coordinate inflation adjustments
on all regulated tiers with other rate adjustments, if any, to reduce subscriber confusion.
Section 76.922(d)(2) of the Commission's rules does not provide transition relief
systems that are taking this inflation adjustment with the same time that all other operators
normally have to implement an inflation adjustment. Cable operators normally have eleven
months to make their annual inflation adjustment, between October 1 of each year and
August 31 of the following year. In contrast, the Ninth Order on Reconsideration only
provides transition relief operators with five months, from April 1, 1995 through August 31,
1995, to make an adjustment for the September 30, 1992 through June 30, 1994 period.
Accordingly, in order to ensure that transition relief systems have the same time that all
other operators have to implement their inflation adjustment, we will waive the requirement
that transition relief systems make their inflation adjustment by August 31, 1995. By this
waiver, transition relief systems will have until March 31, 1996 to recover inflation for the
September 30, 1992 through June 30, 1994 period.
We believe that this waiver would be in the best interests of both consumers and cable
operators. Extending the time that transition relief systems have to recover this inflation
adjustment will benefit operators because it would enable them to limit the frequency of their
rate adjustments by coordinating inflation adjustments on all regulated tiers with other rate
adjustments. Extending the deadline will reduce administrative burdens on cable operators
because they would be able to limit the number of FCC Form 1210 filings and the required
subscriber notifications. Subscribers will benefit from the waiver because it could eliminate
customer confusion associated with multiple rate increases during the next year and delay the
implementation of rate increases reflecting this inflation adjustment.
This is a blanket waiver that is available to all similarly situated cable operators.
Hence, all transition relief cable system operators that will be taking an inflation adjustment
for the September 30, 1992 through June 30, 1994 period will have until March 31, 1996 to
implement this inflation adjustment.
Sincerely,
Meredith Jones
Chief, Cable Services Bureau